Could COVID-19 relief help your business pay for a benefits admin upgrade?
2020’s second Paycheck Protection Program (PPP-2) includes allowances for businesses to make software and cloud computing upgrades. That includes programs that boosts the efficiency of business operation procedures such as payroll and human resources functions. So, how does it all work? And can your company take advantage of a PPP-2 loan?
PPP-2 is more than just paycheck coverage. There are also plenty of opportunities to take on business improvements. These non-payroll expenses can make up as much as 40% of the loan amount your business spends.
What’s Covered in PPP-2 Operations Expenditures
Operations expenditures include “any business software or cloud computing service that facilitates business operations,” including, but not limited to, “the processing, payment, or tracking of payroll expenses,” and “human resources.”
Using PPP-2 loans to transition company processes to the cloud and upgrade software was intended to “help small businesses provide improved service,” according to Rep. David Scott, D-GA.
With the potential to improve overall employee satisfaction and enhance employee retention, as well as save your Human Resources department time and money, there’s no doubt that a benefits administration platform fits the bill. Carefully utilizing your PPP-2 loan could amount to receiving a grant from the government to streamline your HR processes for the long-term.
How Does the Cloud Save Business Money?
Using a PPP-2 loan to move your payroll and benefits to a cloud-based benefits admin platform could save your company an impressive amount of money long-term. As with any cloud-based system, small businesses stand to save substantially by outsourcing tech. As your company grows, the cost of running your own servers, licensing your own software, keeping up with security risks, and hiring your own staff of IT professionals will continue to rise.
What is a PPP loan?
These forgivable loans were initially designed to keep small business employees on the payroll during the pandemic. SBA lenders and federally insured banks or credit unions are able to process PPP loans. The scope of PPP loans has been extended by Congress as the pandemic has continued, allowing companies to make upgrades to their operations with the money in addition to fueling their paychecks. This second round, called PPP-2, has different application requirements.
Who can apply for PPP and PPP-2 Loans?
Business with 500 employees or fewer are eligible to apply for PPP loans, but it’s also eligible to larger employers in certain industries according to the SBA size standard.
Most borrowers who received first-round PPP loans are eligible to apply for PPP-2. The PPP-2 loan is limited to business with 300 or fewer employees, who have spent or have plans to spend the first round of funding, and who have shown a 25% gross revenue decline in 2020 relative to 2019.
You can get details on PPP-2 loan particulars, including parameters for loan forgiveness, here. Applications close on March 31, 2021.
Could the PPP-2 loan be right for your company? It’s just one of the potential funding sources for your benefits administration platform. Talk to WBD for more information on our platform and services.